"The third quarter cash drain was in-line with normal seasonal patterns."
Deutsche Bank analysts Dan Harverd and Richard Gussow believe that the discount at which MA Industries (Makhteshim Agan) (TASE: MAIN) is traded is unjustified. They recommend the stock as a "Buy", and set a price target for it of NIS 21.00, which compares with a current price on the Tel Aviv Stock Exchange of NIS 10.60.
"We believe that the c40% fall in Makhteshim-Agan's share price since the third quarter 2008 results is mainly due to investor focus on working capital management and an increase in net debt," the analysts write, but argue that the third quarter cash drain was in-line with normal seasonal patterns.
"The stock is trading at 3.2 times 2009 estimated EV/EBITDA, an unprecedented 45% discount to peers, which we believe is unjustified," they conclude.
Published by Globes [online], Israel business news - www.globes.co.il - on November 17, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008